Advanced APMs: What they are and why they matter

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With the issuance of the MACRA implementation final rule, provider preparation is in full swing and the Centers for Medicare & Medicaid Services (CMS) is offering providers new ways to participate in the Quality Payment Program.

MACRA aims to replace the sustainable growth formula with a .5% annual rate increase through 2019, at which point physicians are encouraged to adopt one of two quality payment programs: Merit-Based Incentive Payment System (MIPS) or Alternative Payment Model (APM).

APMs, to borrow from Aledade's Dr. Farzad Mostashari and Travis Broome, "are not just incentives, but fundamental changes in how we pay for healthcare in the U.S. It is these models, particularly those dealing with total cost of care, that have the potential to fundamentally alter the value we receive from healthcare."

The goal is to improve beneficiary outcomes and engage patients through patient-centered policies and participation in an Advanced APM allows a provider to excuse themselves from MIPS participation. Providers that receive 25% of Medicare payments or see 20% of their Medicare patients though an Advanced APM in 2017 will earn a 5% incentive payment in 2019, according to the Quality Payment Program website.

To increase participation in Advanced APMs, CMS announced on Tuesday the addition of the Oncology Care Model to its 2017 offerings. The agency is reopening applications for new practices and payers in CPC+ and Next Generation ACOs for the 2018 performance year.

Understanding what an APM actually is

Advanced APMs are similar to APMs, but with a few more requirements. Participants must:

Use certified EHR technology;

Payments must be based on quality measures similar to those under MIPS; and

Require use of a Medical Home Model or bear more than a minimal amount of financial risk.

There is also the Other Payer Advanced APM, which requires participants to adopt a Medicaid Medical Home Model or accept more than a nominal amount of monetary risk.

The models vary in their goals and requirements, but all seek to improve outcomes and lower overall costs. The Comprehensive ESRD Care Model seeks to enhance the care of beneficiaries with end-stage renal disease by coordinating care given by nephrologists, dialysis clinics and other providers. Providers participating in ESRD Seamless Care Organizations are accountable for clinical quality, as well as financial, outcomes under Medicare Part A and B spending, including spending on dialysis services.

Under this model, providers accept increasing shares of performance-based risk depending on which track they opt into. For example, participants in Track 1 — already underway — agree to up to 50% risk sharing. That rises to 60% with Track 2 and to 75% with Track 3. The performance payment limit also goes up with each progressive track: 10% for Track 1; 15% for Track 2; and 20% for Track 3.

Participants should consult the CMS website for their particular model to see what quality data CMS requires them to submit. Providers that leave an Advanced APM before the end of 2017 should ensure they’ve seen enough patients or received sufficient payments to qualify for the 5% bonus. If not, submission of MIPS data may be needed to avoid a draw down in payment, the agency says.

Choosing wisely

“Advanced APMs are increasing in popularity due to multiple factors, including Medicare’s ongoing goal of decreasing the overall cost of caring for Medicare fee-for-service beneficiaries and more specifically the implementation of MACRA,” says Pamela Pelizzari, a healthcare consultant with Seattle-based actuarial firm Milliman.

But there is no one-size-fits-all approach to selecting an Advanced APM. Providers considering entering into an Advanced APM should consider both the downside risk potential and the cost of implementation, says Pelizzari.

“While an Advanced APM may offer upside under the MACRA legislation, it will also include some level of downside risk,” she tells Healthcare Dive. “Some of this risk may be based on services across the spectrum of care (such as hospitalizations), and not just be based on services that providers render to their patients. Providers should consider whether this amount of downside risk is reasonable in comparison to the potential benefits under MACRA.”

Providers should also calculate the cost of reporting quality metrics, care redesign changes and other operational functions under an Advanced APM, and “balance that with the potential financial gains related to both MACRA and any upside risk included in the Advanced APM financial methodology,” Pelizzari adds.

Mo' models! Mo' models! Mo' models!

On Tuesday, CMS announced additional opportunities for clinicians to join Advanced Alternative Payment Models in 2018:

“With these new opportunities, CMS expects that by the 2018 performance period, 25% of clinicians in the Quality Payment Program will earn incentive payments by being a part of these advanced models,” Patrick Conway, deputy administrator of CMS, said in a statement. Other models are expected to become available in the future, the agency added.